CDS Clearing and Depository Services Inc. is proposing rule changes to ensure the Canadian clearing firm has the authority to deal with an emergency situation.
The proposed rule amendment will insert a new section that creates an emergency authority, which is designed to empower CDS management to take necessary action to ensure the “safe, fair and efficient operation of its systemically important clearing operations”, in the event of an emergency that could risk the integrity of CDS, or pose significant harm to the markets.
“This proposed rule amendment provides management with the necessary flexibility to make, and act upon, decisions expeditiously, prudently and in a manner that is consistent with the public interest to avoid or mitigate harm to CDS, its participants or Canadian capital markets,” it says.
CDS notes that the proposals will also bring its rules in line with principles established by global policymakers for critical market infrastructure, as required in CDS’ recognition order.
Comments on the proposals are due by March 3. The amendments would take effect April 9, subject to regulatory approvals.